Pablo, a sole proprietor, sold stock held as an investment for a $40,000 long-term capital gain. Pablo's marginal tax rate is 33%. Loon Corporation, a C corporation, sold stock held as an investment for a $40,000 long-term capital gain. Loon's marginal tax rate is 35%. What tax rates are applicable to these capital gains?
a. 15% rate applies to both Pablo and Loon.
b. 15% rate applies to Loon and 33% rate applies to Pablo.
c. 15% rate applies to Pablo and 35% rate applies to Loon.
d. 35% rate applies to Loon and 33% rate applies to Pablo.
e. None of these choices are correct.